Confronting Unethical Conduct

By Kirk O. Hanson

The litany of scandals afflicting corporate America has raised many difficult questions for associations and other types of nonprofit organizations. Should executives tainted by scandal be asked to leave an association's board? Should the association or its leaders publicly condemn the behavior of some members of the profession or association? What can the association do to help rebuild the reputation of a profession or industry damaged by the actions of some of its members?

Too often associations choose the ostrich strategy--remaining mute because they fear "kicking a friend while he's down" or bucking the wishes of other association members who think any comment or action will bring heightened scrutiny to their own actions.

I am convinced that many associations have failed their professions and industries in times of scandal and crisis. Often, an association and its members will have already heard rumors or seen patterns of wrongdoing before a crisis becomes public. By choosing to do nothing then—or even after a scandal breaks—associations have failed their professions and industries. Leadership and quick action to shore up public trust is needed.

But what should an association do when one or more of its members is waist-deep in a public scandal? Here are a few suggestions:

1. Condemn the sin, not the sinner. The first response of an association must be to label the unethical behavior for what it is. Public confidence in a profession or industry demands that the profession always be ready to draw clear lines between acceptable and unacceptable behavior. It is possible to make a strong and timely statement on the ethics of a specific behavior without judging whether the particular behavior has occurred in this case or whether a specific executive is guilty.

2. Ask the accused to step aside. The credibility of any association depends on the integrity of its leaders. It should be an unwritten law of associations and professional societies that accused individuals step aside temporarily until charges are resolved. This does not admit guilt, but simply respects the special role of the association. An association board or committee member can be labeled "on leave" until culpability is determined.

3. Pull the trigger if guilt is established. Associations must be in the business of building public trust. If the guilt of an individual or member firm is established, then the association must act to force the resignation or withdraw the membership of the guilty. If an association today does not have a process for throwing out a member, it had better create one. Cases where guilt is never proven, but the stench of scandal is strong, present harder choices. Quiet action to force the resignation of an association board member may be called for.

4. Define and advocate best ethical practices, not just minimum behaviors. Most association and industry codes of ethical conduct are least common denominators, a list of provisions that virtually every member can agree to because the standards are so low. Rarely are association codes designed to define and advocate exemplary rather than minimal behaviors. If only the lower boundary is established, those inclined to wrongdoing will always be probing how low is low. In today's ethical climate, restoring trust will require a focus on best practices and exemplary behavior.

5. Keep your ethics current with the changing nature of your profession or industry. The ethical failures in the accounting, financial services, health care, and telecommunications industries can in part be attributed to the rapidly changing structure and altered characteristics of those industries. Ethical norms codified by the firms and their associations in the past addressed problems of a simpler time. Only through visionary action and timely debate on new ethical issues facing the profession or industry will public credibility and trust be sustained.

These five guidelines are good rules for any era, but we don't live in normal times. American business and its professions are under acute scrutiny by the public and by all levels of government. Restoring trust now demands even more committed action.

This is a moment in which every association should renew its ethics efforts, a time in which it should foster an active and public discussion about best ethical practices for its profession or industry. Association meetings should be filled with serious debates about the implications of the current scandals for the professions represented, about how the new economy, globalization, and other developments have changed the structure and public responsibilities of particular industries. Every association ought to know how it intends to help restore public trust across all professions and industries.

Among other measures, I believe that every profession and industry should be conducting a kind of industry ethical analysis, which would highlight the inevitable ethical tensions it will encounter and would point the way toward best ethical practices as well as minimum standards.

Reprinted with permission from the January 2003 issue of Association Management, copyright 2003, American Society of Association Executives, Washington, D.C. In January of each year, the entire issue of ASSOCIATION
MANAGEMENT is devoted to addressing the needs of your board and other volunteer leaders.

Kirk O. Hanson is the Executive Director of the Markkula Center for Applied Ethics at Santa Clara University, and University Professor of Organizations & Society.

January 1, 2003

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